"Grace has been trimming its fat and this should offset some risks of the economic environment," said Pulvirent. "Another plus is that management has focused its attention and research efforts on specialty chemicals, rather than all types of chemicals."

A. My wife and I are both retirees and have been holding 50 shares of UAL Inc. for some time. Do you think we should sell this stock?

Q. While the industry skies aren't friendly right now, this stock should provide longer-term happiness.

Hold your shares of UAL Inc. (around $107 a share, New York Stock Exchange), the holding company for United Airlines, because, no matter what happens with the economy, it will remain a global carrier with an excellent reputation, said Julius Maldutis, analyst with Salomon Brothers.

Despite the fact United's passenger traffic has risen 9 percent this year, its stock doesn't merit a rave review because of the many industrywide concerns.

"Most airlines will issue poor year-end reports in late January or early February, and the UAL stock price is not fully discounted to reflect this," said Maldutis. "There is uncertainty among the airlines regarding their cash flow because of rising fuel costs."

A. My brother and I inherited 500 shares of May Department Stores from my aunt, who worked there for many years. We want to keep them for sentimental purposes, but, with retailing being slow, should we just sell?

Q. Don't keep any stock simply for sentimental purposes. Its role is that of an investment, not a keepsake.

However, since this is a bad time to be selling any downtrodden retailing stock, you would do well to hold on to those shares of May Department Stores Co. (around $44, NYSE), the operator of department, discount and shoe stores. The entire retailing industry has been under pressure because of the slow economy, and this situation is expected to continue in 1991.

"The last few months haven't been generous to May, and its early Christmas figures were off by 5 percent," explained Wayne Hood, analyst with Prudential-Bache Securities, who believes you should ride out the present economic storm. "This will force May to slash prices more and also put further pressure on its profits."

A. Our financial adviser has been pushing H&R Block Inc. as hidden gem. What do you think of this stock?

There will be positive fallout for Block from tax changes, and its electronic filing system is expected to again boost profits as it did last year. Other pluses are the fact that the firm has automated its bookkeeping and increased its highly profitable executive tax service to 300 offices nationwide.

"The executive tax division, which generates a higher billing because it prepares more complicated tax forms, has been growing at a 60 percent clip without doing much marketing of it," said Scott. "As it becomes more aggressive with this service, I am positive that this will strongly improve Block's profits."

A. Our home was extensively damaged because of a flash flood. Can we expect any relief from the IRS on our return this year because of it?

Q. Casualty damages are deductible on a house if they were of an unexpected and sudden nature, as yours were, said Robert Greisman, tax partner with Grant Thornton. Natural disasters -- such as hurricanes, floods, earthquakes, fires and lightning -- fall into this unexpected and sudden category, while erosion or termite damage do not.

"The casualty deduction provided by the IRS isn't very generous," said Greisman. "Your total casualty claim for the entire year is deductible for the amount that exceeds 10 percent of your adjusted gross income, and, should your losses be under that 10 percent level, there is no deduction."

Keep in mind that, before you file for your deduction, you must deduct $100 per casualty loss incident. That means you take $100 off the total claim for each casualty loss, and, if this amount is more than 10 percent of adjusted gross income, you can file for the deductibility. Your casualty claim is net of any insurance reimbursement.

A. I am 77 years old and my husband left 400 shares of Kyocera Corp. Should I sell this stock or keep it awhile longer?

Q. This stock has its pros and cons, and someone your age may view the cons as too big a risk.